Posted
by
Soulskill
on Tuesday March 25, 2014 @05:10PM
from the what-on-earth dept.

Several readers sent word that Facebook will acquire Oculus VR for $2 billion. Mark Zuckerberg says the Oculus Rift virtual reality headset is the beginning of something big: "This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures." The obvious question is: why Facebook would buy a company focused on VR gaming? The Oculus team says, "But when you consider it more carefully, we're culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world; and we both see virtual reality as the next step. ... It opens doors to new opportunities and partnerships, reduces risk on the manufacturing and work capital side, allows us to publish more made-for-VR content, and lets us focus on what we do best: solving hard engineering challenges and delivering the future of VR." Put more simply: money and connections.

"I guarantee that you won't need to log into your Facebook account every time you wanna use the Oculus Rift."

"It it enough to bring a consumer product to market, but not the consumer product we really wish we could ship. This deal is going to immediately accelerate a lot of plans that were languishing on our wishlist, and the resulting hardware will be better AND cheaper. We have the resources to create custom hardware now, not just rely on the scraps of the mobile phone industry. There is a lot of good news on the way that is not yet public, so believe me, things will become a lot more clear over time."

"Sure, we could have made more money down the road, but this deal was not about making the most money. It was about doing the best thing for the long term future of virtual reality.This lets us make CV1 everything we want it to be, which is going to drive much larger sales and adoption."

"I won't change, and any change at Oculus will be for the better. We have even more freedom than we had under our investment partners because Facebook is making a long term play on the success of VR, not short-term returns.A lot of people are upset, and I get that. If you feel the same way a year from now, I would be very surprised."

Much more likely facebook management want to get into virtual reality social gaming, along the lines of "The Sims" and try to exclude other companies from joining. The big catch of virtual reality social gaming, is your going to have to be pretty much at the bottom end of the social scale to lock yourself in that world via a virtual reality headset and, facebook will charge you a pretty penny virtual elements (virtual social standing driven by peer pressure being the leverage) and if you can already afford

If Luckey and Zuck say that this changes nothing and that they aim to just sell the hardware to us without any FB strings attached, I believe them... now. I also believe that very soon after launch, there will be a boardroom meeting at FB to discuss ways to create more synergy between the Occulus and FBs core business, which is 1) suckering more people into their service, 2) retaining those people as active members, 3) mining any and all data from those customers, 4) selling that data to interested 3rd part

discuss ways to create more synergy between the Occulus and FBs core business

To me, I don't think you are understanding Facebook's purchases - either WhatsApp or Oculus.

Facebook is "buying out" - that is, buying to gain access to people who are not, and may never be part of the core business. WhatsApp users are a great example of that, since WhatsApp does zero session or even identity tracking kinds of things.

Facebook is trying to avoid becoming one giant silo, and instead is trying to become a well-rounde

No doubt this purchase is not all cash-- probably mainly stock. When your stock is trading at a P/E of 106 then trading 2Billion of your stock to buy another company seems reasonable. It's like buying it with moldy turnips at the fresh turnip price.

if that thing were any bigger and heavier, it would need braces to your shoulders and hips. non-starter

Yes, because we all know that technology never evolves. This thing will always remain big and heavy, and no amount of Facebook money will ever allow for a rev 2.0 design that is smaller, lighter, more stylish, or more capable.

I mean, aren't you still sporting a cell phone like Gordon Gekko [google.com]? Doesn't your laptop still weigh 25 pounds?

Too bad. Through my use of the Rift, facebook will find a way to monetize me and what I do beyond the purchase price of the Rift. That's what they do; I can't see Facebook's culture changing anytime soon. Nope.

Yup, this is a fucking disaster. I was really looking forward to using an Oculus Rift. Now it's going to be a vehicle for delivering ads, and we won't see a useful implementation until all the patents expire, if then. The worst part is, Zuckerberg probably doesn't even realize he's killing the product by buying it.

As far as I know, FB has never sold a hardware product til now. So it's really hard to guess what business strategy they have in mind. If you remember, they even made efforts to avoid the cell phone market, selling FB overlay over Android instead.

I think we are describing the same thing. Facebook convinced a couple manufacturers to pre-install that overlay in shipped units, and those probably did not sell great. But the overlay can still be manually installed from Google Play store, as far as I know, as is still in active development. I don't know how many downloads have been made to date.

I think we are describing the same thing. Facebook convinced a couple manufacturers to pre-install that overlay in shipped units, and those probably did not sell great. But the overlay can still be manually installed from Google Play store, as far as I know, as is still in active development. I don't know how many downloads have been made to date.

I'll wait and see, but yeah, my interest in the Rift just took a nose-dive as well. A damned shame, it's the first really interesting thing to happen to gaming in a decade or so. Now it looks like we'll have our choice of selling our souls to our choice of Sony or Facebook if we want to play.

People who foolishly think of themselves as facebook "users" with "free" accounts are not paying because they are the products and all those details they post about themselves are the free "advertizing" and free "product details" that the products self-generated. The actual customers of Facebook are the big advertizers who are shovelling dollars into the Zuck empire.

Notch has already canceled his plans to bring Minecraft to the Rift. Given that the entire success of the Rift so far has been from the community (literally: the Rift was crowd-funded and would not exist today if it wasn't for the community), and I have yet to see a single person in the community comments on a number of sites who doesn't dislike this move, I'm guessing the blowback is going to be pretty massive.

I myself have already gone from debating whether I should pick up the dev kit version 2 to play around with or wait for the consumer version, to not planning on buying it ever, and I'm not the only one.

Name one product Facebook acquisition which it has not been monetised by their data mining core business. Here is a list [wikipedia.org] to help you. Whatsapp and Oculus don't count, as they were recent acquisitions and haven't had time to be insufficiently profitable to be butchered.

I mean I have no problem when a product flops, assuming the person creating the kickstarter didn't know it would flop. If they make a legitimate effort with the money they get, and they didn't miss-represent themselves, then that's fair in my opinion.

But this is basically them killing off what was a successful project. Maybe it's a reaction to the recent Sony announcement, but even if they thought they were about to lose, to me they still had a duty to the, inappropriately termed I guess, investors.

This almost makes me wonder if kickstarter needs to add some kind of protection against this kinda thing.

People who did the Kickstarter got their rewards. They got their dev kits. The kits worked. They arrived a little late. That is all that was ever promised. If I purchase something off EBay I don't get upset if the seller gets purchased by Facebook. Oculus isn't even a service. Its not like Facebook is buying users like they when they purchased Instagram.

In my view (and I understand this isn't universal), when you buy into a kickstarter it's because you want to see something happen. It's like investing, but instead of expecting money out of it, you expect a thing to become available which otherwise wouldn't (and which you then might have to pay additional money to get). It would be like donating to PBS, receiving your mug, then finding out they'd sold PBS to TLC and were buying an island somewhere.

For those that view buying into a kickstarter as a gamble against getting the promised reward (which I accept as a valid view), then I agree with this argument. Oculus delivered the dev kit, and as someone who owns one, it's what was promised, with the added bonus that it caught on and there is actual software for it.

What is sad is that current SEC regulation and other securities rules make it illegal for companies to offer shares or actual ownership in a company through something like Kickstarter. I'll admit there is potential for fraud to milk piles of money from people with not much disposable income, but it does get to absurd levels with this too.

It really seems stupid that you need to be a millionaire in order to simply qualify to spend $10k (or even $1k) of your own money into some random company that you think may make a better mousetrap. Yet at the same time you can throw away piles of money into stupid penny stocks or worse buying a used automobile or a "membership" in a multi-level marketing scheme.

Kickstarter does offer some protections from would-be fraudsters as they can require a refund of any money received through Kickstarter if for some reason they haven't honored their promises.. especially if rewards were never delivered. Unfortunately all you can get back is the money you paid. Somehow I don't think Occulus is going to care and might just prefer giving refunds for those who are pissed.

AFAIK, SEC regulation do not strictly prevent companies from selling unregistered shares to unaccredited investors.Rules 505 and 506 allows a company to sell unregistered shares to up to 35 unaccredited investors (and an unlimited number of accredited investors). This limit of 35 unaccredited investors is the thing that kickstarter bumps up against.

However, there is another way to do this. It is actually possible to start a "closed-end" registered investment company (like a mutual fund company) that can invest in startup companies as an accredited investor. This investment company could accept money from unaccredited investors and this money can be invested in some startup companies.

Sadly, the track record of such companies is pretty poor.

For a recent example, consider GSV [nytimes.com] which was able to use this strategy to allow unaccredited investors to put money into Facebook, Groupon, and Zynga before they went public. The problem is that the liquid value of closed-end fund, is not the value of the underlying securities, but the resale value of your share in the investment company. This is because in a closed end fund, you have to sell your share in the investment company to someone else (the fund won't buy it back from you). In the GSV case, the share value of GSV was driven up by the promise of getting in on a pre-ipo Facebook investment, but it then crashed when the Facebook ipo didn't perform as well as expected.

I can see Facebook thinking that maybe they can make money from the Oculus, and maybe they can, but it's not going to be in a way that I assume most of the original backers thought they were buying into.

But there's no way in hell the Oculus guys think Facebook will carry on their vision and the vision they sold their backers on.

Oculus wanted to sell you a monitor. It's in 3D, it straps to your face, it tracks your head, it does a bunch of way-cool stuff, but fundamentally it's just a screen.

Facebook doesn't want to sell you a screen. Or a keyboard, or a THING. They want to sell you an ECOSYSTEM. They want you to provide them with your data. They want you to be their product. Their continuing revenue stream.

Personally (and I get that this isn't universal), I view them more like the rewards PBS gives when people donate. No one donates because they really want that PBS mug, they donate because they want PBS to be a thing, and the mug is a nice bonus.

To me this is like donating to PBS and a week later finding that they've sold the station to TLC. What, you don't want to watch scripted reactions about house decorating all day, too bad, we sent you your mug!

If you view kickstarter as a gamble against getting the promised rewards, then yes, I agree they delivered. I own a dev kit and it's what they promised. But I have to assume at least some backers were buying into the long term goal and not the interim product.

"But when you consider it more carefully, we're culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world;... It opens doors to new opportunities and partnerships, reduces risk on the manufacturing and work capital side, allows us to publish more made-for-VR content, and lets us focus on what we do best: solving hard engineering challenges and delivering the future of VR."

If you find yourself saying things like this or speaking in this style you should probably just kill yourself because there's no hope left for you as a human being. God damn what an abuse of language.

lets us focus on what we do best: solving hard engineering challenges and delivering the future of VR.

I'll bet there was not a person in the world before today who would say that's what Facebook does best.
Delivering the future of VR is what Facebook does best? Have they always felt that way? Because I didn't realize that.

No. This is worse, way worse. While Microsoft has difficulty in executing things, they still maintain a basic respect for their customers. Facebook on the other hand has demonstrated time and again their absolute lack of scruples and moral integrity when it comes to monetizing their users.

Their hardware is known to do what it is advertised to do, be reasonably well built, and not have a bunch of BS tie-ins. If you buy a MS keyboard or mouse, well that's what you get. You don't have to install "Bing, for your Mouse!" or some shit like that to make it work. You plug it in to the computer, it does its thing. It isn't prevented from working under Linux or anything like that. I know plenty of Linux types that do not care for MS software, but like their hardware.

Allot of negative comments here. I see how this can go bad too. Oculus seemed hellbent on providing great consumer level VR. That is what they do, and it's the *only* thing they do. That is why they would make a great platform. When large companies come in, they have larger strategies into which to fit everything. They do *many* things, and ends up doing many of them worse for that single reason. Big choices gets affected by strategy for other things, and the quality gets watered down.

Knutsi- I agree with all your points, but wanted to extend your comment a bit.

Probably that last line is the most significant motivator for both parties--

For Oculus, Sony was raising a threat. Also, supply of displays from Samsung might prove to be an unfeasible constraint. Especially if Samsung decides to create their own VR googles. With FaceBook money, they can build their own OLED factory if need be.

For FaceBook, they have to really worry that a technology on the horizon might take their hundreds of millions of eyeballs off FaceBook html and point them in a different direction- just like FaceBook took eyes away from network television. They just bought what might have been a FaceBook killer in the future. Maybe they aren't planning to weld Oculus rift onto the FaceBook homepage. Maybe they'll let it crush facebook, but they won't care because they'll be riding on top of the beast that stomped it to death.

So, who wants to bet whether or not the basic Oculus Rift will be permanently tied-into the Facebook ecosystem somehow?

Maybe some "cloud" features (required to access support forums, firmware updates, online configuration page, etc) that will be tied to your Facebook account -- none of which will make much sense, but somehow it will get shoe-horned in there.

Actually, let me amend my previous post, on second thought I don't think it's really the end-users that are the true targets of this acquisition.

It's would be the game devs. Imagine a world where all commercial Oculus games are required to be developed in such a way that they have some sort of social-media tie into Facebook. It won't happen at the official public release of course -- that would scare too many people off. I imagine they'll play nice until the Oculus achieves market dominance. Then, Facebook will start to creep into the arrangement, as devs find out they need to jump through more and more hoops to maintain access to the Oculus ecosystem.

End users too - with the second developer kit at least the OR involved a positional tracking camera. Now sure, it could (and should) include near-IR band-pass filters to eliminate any potential invasions of privacy, but given Facebook's track record I'm betting they'd just *love* to get direct driver-level control of an unfiltered webcam mounted on N% of their users' computers. (Whoops, almost put " customers' " there. Easy to forget we're the product, not the customer)

By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures."

We need some PR-friendly slang for this new kind of interaction. I propose that we call it "going outside". There could be entire phone apps devoted to "calling" your friends and arranging to "meet" them somewhere...

1). So people donated $2.5 million to start up a company that sold for $2 billion, and they don't see a dime of that.2). Worse, they have no control over the company, so Facebook now gets to lock down the use of the technology to only big developers that can afford to license it rather than being open to hobbyists the way many of the backers were not doubt had hoped.3). Oh, and a "next generation" version that is completely incompatible with the current one is now doubt on the way. Since your old generation version won't be available anymore, good luck getting any developers to support it.

I am one of the original Oculus Kickstarter backers. I have received my Rift development kit without any problem, so I think you are grossly unfair to Oculus as far as the Kickstarter campaign is concerned. The perks were the development kits, not company shares, so there is no reason why I should be getting a cut of those 2 billions.

Also, honestly, do you really believe the company is operating on the Kickstarter money? You would be naive - there are several large investors there, the Kickstarter money went mainly into the original development kit.

However, I do wonder what the heck is going to happen now. They better tread really carefully or they could alienate many of their customers and developers in no time if they try to aggressively push Facebook everywhere (like the payment system - seriously, if one of the stated reasons for getting acquired was to get access to the Facebook's payment system, that's nuts).

Yeah, and I'm sure people have HD-DVD dev kits too. Doesn't do much good when there's no one making HD-DVDs anymore.

Likewise when Facebook modifies the interface to be completely incompatible with your dev kit, what good is it? Maybe you can make stuff for your own amusement, but you'll never be able to share it with anyone who doesn't also already have their own dev kit.

As far as I was concerned at the time, the amount I donated got me a dev kit and access to the development kit. Which is exactly what happened, certainly more than you can say for some Kickstarter projects.

Why would i care if the business was sold for any amount of money? I didn't back it to own part of the business, there was never an expectation of that. It was only ever because I wanted early access to what looked like, and still looks like, the most viable VR headset made to date.

On "control over the company", devs did have a kind of control in that they could provide feedback to the company, and help uncover problems that would build a better commercial headset.

As for the "next gen" version, sure it's unlike the current one - but that means a better consumer product in the end, so if you are developing anything for the Oculus instead of just using the dev kit as a toy, why would you have an issue with that? It means an even more viable product in the end will be delivered, which means more customers for whatever you are developing. To someone developing for this the $350 a next-fen dev kit costs is NOTHING compared to resources you put in for development of a new product to run on it.

I don't know what it means to have Facebook own this. The only short-term thing I can imagine is that the consumer version is closer to market now than it might have been otherwise... since Facebook has not yet destroyed WhatsApp I remain reasonably optimistic that the Oculus will deliver what we were expecting all along with minimal interference from Facebook, and some strong financial backing to take on larger companies like Sony.

A company branching out into tangentially related fields? It's like when that fruit-themed computer company decided to get into the record business. That sure didn't go anywhere, did it? Or when they decided they were going to try their hand at making telephones, what a lark!

I'm not a fan of Facebook, but I think this is a good partnership for both parties, as well as consumers.

Making Snow Crash into a reality feels like a sort of moral imperative to a lot of programmers, but the efforts that have been made so far leave a lot to be desired.

It is almost painful for me to watch some of the VRML initiatives. It just seems so obviously the wrong way to do something. All of this debating, committee forming, and spec writing, and in the end, there isn't anything to show for it. Make something really cool first, and worry about the spec after you are sure it's worth it!

I do think it is finally the right time for this to start happening for real. While a lot of people could envision the possibilities after seeing DOOM or Quake, it is really only now that we have general purpose hardware acceleration that things are actually flexible enough to be used as a creative medium without constantly being conscious of the technical limitations.

The Metaverse of the Snow Crash world was basically an epic social virtual reality experience. I've always figured Carmack would be involved in making that a reality somehow, and the Oculus Rift certainly seems like it could be a critical part. Facebook actually makes sense from a social perspective as well.

I'm sure there's going to be a lot of people terrified because of imagined privacy implications, but I'm still fascinated to see where this ride takes us.

If Zuck thinks the future of Oculus is about connecting and talking with people in virtual... And NOT firing rocket launchers at them.... Well then he's grossly mistaken about the true purpose of the Internet!

Ok now Occulus VR is officially dead. This is the most meaningless acquisition ever. I guess it was cheaper than the inane SnapChat acquisition but there is next to zero synergy between Facebook and a VR helmet.

>exactly the same thing as Oculus VR.Only in the sense that they're both VR helmets. IIRC the Sony demo models featured more lag, considerably lower resolution head tracking, and a much inferior screen technology. Meanwhile the Rift folks were suggesting that the final hardware had been selected and they were simply waiting on the component hardware market to make it available to them, with the planned commercial unit having dramatically better screen resolution and less lag than even the second developer kit.

The obvious question is: why Facebook would buy a company focused on VR gaming? The Oculus team says, "But when you consider it more carefully, we're culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world; and we both see virtual reality as the next step.... It opens doors to new opportunities and partnerships, reduces risk on the manufacturing and work capital side, allows us to publish more made-for-VR content, and lets us focus on what we do best: solving hard engineering challenges and delivering the future of VR."